Spousal consent is required when money is leaving the ABC Plan (MMP), but the plan's installment form did not have a section for spousal consent. Being new to the relationship I inquired with the client if there was a reason why there was not a spousal consent section on the plan's installment form.

As a result the client told me that they do have participants provide a spousal consent wen a termination is requested which is generally when an installment would be elected. The client has asked if it was necessary to have a spousal consent provided again if a change is being made to the setup of installments which is usually why a participant would be sent/complete an installment form. I thought that we would want to get spousal consent if any kind of change is being made to an installment payment setup, but I wanted to see if anyone had any thoughts with respect to this matter.

Has the IRS decided whether an employee can use FSA to pay for a membership for an Air Evac?

Not the ambulance trip cost but the membership that discounts the cost?

An active participant died in 2007.

there was no designated benny other than his living trust.

plan provides that if no benny then the death benefit must be distributed by end of 5th caendar year following death.

so it seems that the distribution must go to his estate by 12/31/2012.

he would have reached 70 1/2 in 2010.

so if lump sum goes to estate in 2012:

does estate then pay required taxes?

does it have to go to a benny in will immediately?

other views?

perhaps this is all for the tax advisor to decipher.

thanks

Big plan, prior yr tested, discretionary match, off calendar yr plan. Employer always makes the match. Prior to EGTRRA restatement, match was 100% vested and doc allowed testing with deferrals under ADP Test. With EGTRRA restatement, 3 yr cliff vesting put on match for employees hired after a specific date.

Questions... (1) if I do not have any participants who fall under the new vesting schedule receiving a match, can I continue to test the match with the deferrals under the ADP test? (2) if I have participants who will now have match subject to vesting in the test, do I need to test my match under ACP? I think yes, but everyone or just the vested match? or even if I do not have any non-vested match participants, SHOULD I start testing match under ACP due to EGTRRA restatement?

AND (3) because it's prior yr testing, what would my prior year ACP be? 0%? I cannot use the assumed 3% because this is an ongoing plan who happened to change their match vesting. So the 3%, I feel, would not be able to be used.

ALSO ADP side, I have a participant who was NHCE in prior yr but is HCE for this current yr. I understand that I need to show him twice on the test, as NHCE with his prior yr deferral percentage and as HCE with his current yr deferral percentage. Is this correct? Wonder how I will get Relius to do that!

ANY help, reference material etc etc etc would be most appreciated! I'm going gray thinking about this! Thanks so much!

Would a plan year beginning 10/1/2011 be subject to the 2011 or 2012 limitations

I have a client who is getting multiple requests from Participants, both Active employees and deferred vesteds, about starting their benefit payments. The client requests a distribution package, send it out to the participant and then does not hear back until the package is outdated. The Plan is a defined benefit and each request requires that a complete set of calculations is performed. The client is getting tired of paying for multiple calculations on the same participant. I was wondering if anyone out there has a solution that has helped in this type of situation.

thanks,

Connie

At the end of the year I add the health insurance premium to box 1 of the W2 to the > than 2 percent shareholder of an S corporation.

Is the health insurance premium considered salary and is it pensionable?

Thank you.

My client just purchased a group health insurance plan for his business.He wants to pay for it 100 % .

The broker told him that if he charges the employees money for the plan if would make it less discrimatory? Is this true?

Thank you.

We are a TPA in the process of taking over a Cash Balance and 401k PSP from another TPA. We have noticed that no 5500-SF or 5500 has been filed for 2008, 2009 and 2010 for the Cash Balance Plan. Instead, the TPA has been filing the Schedule SB with the 5500-SF for the 401k Plan!!

We have already discussed going into the DFVCP with the client for this egregious error.

I just wanted to cover all my bases and put the question out there (in case I am missing something) to you all to see if under ANY circumstance the way the current TPA is doing this is ok? The current TPA says this is how they do all their Cash Balance Plans which worries me a lot, sounds like they have a major problem on their hands (as do their clients).

My client ABC Company allows participants to make up missed contributions from the time missed during a military leave. While they do have a payroll process in place, the participant would like to send a check for the amount of the missed contributions. The participant is aware of the loss of the pre-tax benefit by doing so.

Question - Is a participant permitted to make up the contributions to the 401k plan outside of payroll deferrals?

Does anyone know the TPA's responsibility for late 401k deposits, beyond informing the client? If the deposits are extremely late, does the TPA have any responsibility to participants? Any experience with this?

Thank you!

Can a plan be designed to limit matching contributions to compensation earned in an eligible job classification? My understanding is that it could, provided that the ACP test is satisfied using a 414(s) definition.

Ever since the advent of making every participant their own allocation class, I have normally eliminated the last day and service requirements to receive an allocation, figuring I just leave those terminees out of the allocation (assuming I satisfy 410(b) and 401(a)(4)). About the only downside that I have found is that I can not exclude a participant who terminates with less than 500 hours in the testing, when normally such employees are excludable.

On the flip side, I find that it gives me more flexibility in that: (1) I can use a young terminee with low pay and give them an allocation to help testing without the need to adopt an 11(g) amendment; and (2) that young terminee may not even be vested, and I can't do that with an 11(g) amendment.

However, I see some cross-tested documents out there that still have EOY and service requirements, and I am just wondering if I am missing something or others have reasons that outweigh my reasons.

Any thoughts would be much appreciated!!!

Do employers (with fewer than 100 participants) who contribute towards DB multiemployer plans qualify as “eligible employers” under Section 408(p)(2)©(i)?

The background to this question is as follows. Specifically, I want to determine whether small employers who contribute towards multiemployer DB plans are required to use an interest rate of 5.5% or higher (if so specified in the plan) per WRERA provisions.

The ACP test fails and distribution of the excess aggregate contribution is going to be made to the HCEs. Does the distribution still need to be paid within 2 1/2 months (to avoid the penalty) if the match won't be deposited until the extended tax return due date?

Until this year, my employer (less than 15 employees) paid our health insurance premiums in full. This is covered in our employee manual & was understood by all to be a part of our compensation.

This year premiums have risen to such an amount that he has decided that the employees will pay 25% of the monthly premium. Only 5 employees will be on the company plan; others are covered by their spouses plans - they are compensated for what they pay to be covered that way.

Since this is a small company, the insurance company required each employee who would be on the plan to submit a form giving health history, age, etc.

Individual rates were calculated, then the total being the monthly premium.

The individual rates are - from youngest to oldest:

$161.56

$277.48

$305.57

$744.61

$965.88

Total monthly premium $2455.10

Average of this would be $491.02

25% would be $122.75

The employer has decided that it is not fair to younger employees to pay 25% of the total monthly premium since their individual rates are lower.

So, each employee will be paying 25% of the individual rate determined by the insurance company.

Therefore employee portions of the premiums are:

$161.56 x 25% = $40.39

$277.48 x 25% = 69.37

$305.57 x 25% = 76.39

$744.61 x 25% = 186.15

$965.88 x 25% = $241.47

I have never heard of a company having employees pay different amount for their part of the premiums (except when spouse &/or family are added).

Is it lawful for employee premiums to be charged this way?

The plan year end is 9/30.

The Employer sponsored both a 401(k) plan and a prevailing wage pension plan until the plans were merged 3/31/2010.

Z's termination date is 7/1/07. Z was paid out of 401(k) plan during PYE 9/30/2008 so we did not report him on an SSA for that plan; however he was not paid out of the PWPP during PYE 9/30/2008 so we reported him on an SSA for the PWPP.

The PWPP merged into the 401(k) PSP 3/31/2010 and we filed a final 5500 for the PWPP (short PYE 3/31/2010).

Z still has an account balance in the 401(k) plan (PWPP money source) as of today.

Do you think we should prepare a 2009 8955-SSA for the PWPP and report Z as a code "D", and also prepare a 2009 8955-SSA for the 401(k) plan and report Z as a code "A"? Or should we not prepare any 8955-SSA until he is paid out of the 401(k) plan? Or? I don't want this to come back and haunt us 10 years from now...

Any input would be greatly appreciated.

Thanks!

Plan sponsor wants to terminate overfunded DB plan, transfer excess assets to existing 401(k) profit sharing plan that qualifies as a "qualified replacement plan", thus exempting the sponsor from the 4980 excise tax.

There has been recent guidance indicating that 401(k) "safe harbor" contributions cannot be funded by forfeitures, since the contributions leading to the forfeiture account weren't fully vested at the time they were made.

I haven't heard much discussion as to whether this same restriction would apply to excess assets transferred from a terminated defined benefit plan. I can see an argument both ways, and have found no official guidance at all.

Any unofficial guidance would be appreciated!

Dog

Participant DOB 1/11/1940, she turns 70.5 on 7/11/2010 and her required beginning date is 4/1/2011, the participant does not want to wait and decides to take her first RMD in 2010 and it is distributed to the participant on 9/30/2010.

The participant dies on 1/27/11 before her required beginning date of 4/1/2011.

Question - Should the 2011 RMD payment be calculated using the life expectancy of the deceased participant's or the beneficiary? Please note that the beneficary is the spouse.

I have a PSP that is a controlled group. Two companies, one owned by wife and one by husband. They have the plan together.

No other EE's.

They are going through a divorce. Company's will no longer be a controlled group.

As a result Company A (husband) will retain his plan and Company B(wife) will cease to be a participating ER.

The wife wants to set up her own plan and be able to put a contribution in for 2011.

Company A plan does not have a last days requirement.

For the year end PS contribution for Company A - would Company B have to deposit the same percentage as company A for payroll through date or cessation?

In Company B's new plan for the year then would I have to count only pay from the date the plan started.

Goal is to separate ASAP and have each make their own year end contribution in their own plan.

Thanks for your help.

Pat